The introduction of investment based residence right system was once one of the hot topics discussed in the process of formulating the property rights section of the Civil Code of China. Although there was little opposition to the view of allowing the free transfer of the right of residence in the solicitation of opinions, Article 369 of the Civil Code stipulates that the right of residence shall not be transferred, which shows that legislators believe that the investment based right of residence in comparative law is fundamentally inconsistent with the original intention of the establishment of the residence right system and the needs of social development in China. In the context of the moderate release of homestead reform, and in the practical exploration of the transfer of homestead, the mainstream view in the theoretical field is to shape the right to use homestead as a pure usufructuary right. The path of rural residence right which expands the use and usage rights of homestead has also attracted academic attention. Relying on the integration of real estate and land disposal rules and the free transfer of investment residential rights to achieve the transfer of homestead has been recognized and praised by some scholars. However, analysis has found that there are functional differences between the investment oriented residential rights in rural housing and the residential rights stipulated in the Civil Code, which conflict with the restrictions on transfer and do not have the possibility of breaking through the existing use control to achieve moderate release of homestead, and have little practical value in promoting the transfer of homestead. Abandoning the right expansion model represented by the residential right path will be a rational choice for the future homestead transfer model. As an alternative, the conversion model of homestead generated from local practices is more reasonable. Transforming the right to use homestead into the right to use collectively operated construction land not only conforms to the legal system of homestead, but also follows the historical logic of the evolution of land rights in China, demonstrating the social effect of promoting the flow of land elements and promoting the development of a unified domestic market and urban-rural integration. The transformation has been completed from policy documents and pilot experience to local regulations. In order to achieve the goal of moderately invigorating homestead use right, it is necessary to summarize the emerging homestead right transformation model in pilot areas, form institutional norms at the legal level, and take the maintenance of the status of village collective owners and ensuring the interests of farmers as the starting point, form a land planning system and land income distribution mechanism in line with rural characteristics, and establish the trading rules for the use right of collective operated construction land in line with market demand.